Archive for the 'Administration' topic

What is the business and capital as part of the business?

The business is defined as “the utilization of capital in performance to produce value in results”. Every business in the world invests in capital needed, in order to utilize capital in performance, in order to produce output results. The capital must have a worth that justifies the investment costs for acquisition or development and implementation as performance solutions.

Capital is the investments in the business to have the capability to produce results

The only reason to invest in capital is to provide the capability to produce results. Capital is all the tangible and intangible assets available to be utilized by the business. Capital includes the business organization, processes and systems, humans and their capabilities, facility equipment and supplies, management plans and tactics, and information capital. Capital has a worth in the capability to create result value-added attributable to the capital over the capital life.

20^th century management fails to organize and manage capital as part of the business

Today, people think of capital as items in an asset register or on the payroll, rather than as items to be managed and utilized as part of the business. Businesses invest in enormous sums of money capital and then fail to identify the specific capital items developed, the costs of developing the capital, the worth of the capital as developed, the utilization of the capital to create value, the cost of capital utilization or consumption as capital worth deteriorates, and the value created to return the original investment. [more...].

Administration is one of the top ten problems of 20^th century management

20^th century management includes wasteful and counterproductive administrative functions

20^th century administration performs a function involving fixed routine tasks. Responsibility is for the function or the process of administering, rather than producing results. Administration is responsible for managing enterprise capital, but few administrators recognize this responsibility, in effect preventing proper capital management. Much capital is assigned to centers or labeled as “intangible assets”, removing it from professional management. Other capital is loosely administered through functions, instead of being specifically managed to produce benefit and achieve a return on the enterprise investment. The emphasis is on administrative performance rather than capital result management.

R-pM converts administration to professional capital management

Result-performance Management (R-pM) organizes all enterprise capital for professional 21^st century management for operation, support, development, and utilization to produce results. R-pM replaces administration with capital management. Capital managers must produce capital management results to develop, maintain, and improve the worth of capital to provide specific solutions. Performance management, within capital management, deploys and maintains solutions to produce revenue, capital, and investment results.< [more...]

There are a wide variety of performance managers in 20^th century management. Performance managers may be responsible for human performance management, business performance management, capital performance management, or management performance. Similar performance management responsibilities remain under 21^st Century Management. But under 21^st Century Management, performance management responsibilities are precisely defined.

20^th century management mixes results with performance and manages both as performance

One serious flaw of 20^th century management is the definition of performance. Performance is defined to include not only the activity of performance but also the results produced from performance. This definition prevents 20^th century management from managing the business defined as “the activity of providing goods and services”. Both the activity and the goods and services are defined as “performance”. Performance management systems, business performance management, business process management, and other 20^th century management methods employ this definition.

The performance manager must work in a poorly defined environment. [more...]

Human Resource Managers are important capital managers

Are you a human resource manager? How do you approach your work? As a routine administration function? As responsibility for the enterprise human capital to ensure that human capital maintained ready to perform, is developed to acquire new capabilities to increase human worth, and provided with knowledge needed to provide value to the business?

If your answer is closer to the latter, you will clearly benefit from R-pM. The impact of R-pM on human resource management is explained in the Human Capital Management Forum, and in human capital articles, such as “Integrate Human Capability Capital with the Business” in 21^st Century Management Magazine. R-pM goes beyond 20^th century human resource administration to provide professional 21^st Century Human Capital Management.

Result-performance Management (R-pM) organizes the business for 21^st Century Management

The means to understand the actual business and the human capital that you support is through Result-performance Management (R-pM). The enterprise business and your business is defined by only two entities:

• Results: The economic outputs that create the value from the business
• Performance Solutions: The human and other capital consumed in performance to generate the costs incurred by the business to produce result value

Even as human capital manager, you manage only these two entities in your business, as a sub-set of the enterprise business. [more...].

Capital Management is the management of enterprise capital in performance solutions to produce results of value needed by the enterprise. Capital management is an important part of 21^st Century Management.

Capital is not managed in 20^th century management

20^th century management does not manage capital. 20^th century management provides administration functions like finance, accounting, human resource administration, purchasing, information technology, and corporate planning to administer selected tangible capital. Most capital is not identified or managed by the enterprise. Much capital is created and used in the enterprise, but is known only in the department that keeps it. Much enterprise capital is assigned to a responsibility center and managed no further. The capital in administrative units is administered rather than managed to provide solutions, control costs, create value, and increase in worth.

Capital investments are not managed to develop specific capital to produce value in results

Enterprises invest significant sums in the capital used, but these investments are not managed to provide the specific returns. The tangible capital is normally developed as a lump sum for an asset or a project. [more...]

Purchasing Managers are important capital managers

Are you a Purchasing manager, responsible for purchasing, maintaining supply inventories, and recording supply expenses? How do you approach your work? As a routine function? As responsibility for the enterprise supply line to ensure that the right supply capital items are provided on time to produce enterprise results?

If your answer is closer to the latter, you will clearly benefit from R-pM.

Result-performance Management (R-pM) organizes the business for 21^st century management

The means to understand the actual business that you support is through Result-performance Management (R-pM). The enterprise business and your business is defined by only two entities:

• Results: The economic outputs that create the value from the business
• Performance Solutions: The capital consumed in performance to generate the costs incurred by the business to produce result value

You manage only these two entities in your business, as a sub-set of the enterprise business. Planning, gathering information, and managing other entities like activities, tasks, functions, positions, etc. diverts your time away from managing your business.

The 20^th century enterprise has never managed the business

The dilemma that you face is that your enterprise has never managed the business. [more...].

In most enterprises, human resources are administered as employees and are assigned to positions in organization units. For most, there is no way to measure the value they produce, evaluate performance costs against result value, assess their worth as human capital, or to develop them to provide measured increased value to the enterprise. Administered employees do not have a defined stake in the enterprise.

The only way to manage and develop human capital is through 21^st century management. Result-performance Management (R-pM) is the conventional method to organize the business for 21^st century management. R-pM manages the development and utilization of specific human capital performance solutions to produce measured result value, increase capital worth, and justify increased performance costs.

Conventional human resource management methods prevent good human capital management

There is a lot of talk about human capital, intellectual capital, knowledge management and other means to improve the capabilities, productivity, and output of human capital. But, each item is treated separately. We have no way to integrate human capital performance with the result value created and the worth of human capital. [more...]

Why do we have unrecorded and “intangible” assets that we do not account for? Why do we have unknown costs? Is this acceptable financial and capital management? Much capital investment is not recorded as a specific asset to know development cost.
There is no such thing as intangible assets or unknown costs. What we have is unmanaged capital and unrecorded performance solutions that prevent knowing capital worth, performance costs, and return on investments. We must have a record of all capital and the development costs to manage costing and the return on investment.

We manage capital as individual entities rather than one set that includes all capital

Capital used in performance is not managed as one set that includes all capital. We administer historically known and accounted for assets as separate entities such as fixed assets, employees, cash, etc. The conventional enterprise has no framework for disciplined capital management.< [more...]

Human resource development and management does not develop human capital precisely to produce valuable results and increase in worth

There is a lot of talk and writing about human capital, intellectual capital, knowledge management, and other means to improve the capabilities, productivity, and output of human capital. Despite the talk and writing, companies have never been able to integrate business capability requirements, human capital capability development, qualified human capability deployment, human performance and cost, the value created by human performance, the value-added by human capabilities, and the worth of specific human capital.

Many companies proclaim that their people are their most important asset. But most of the companies manage human resources as employees, rather than managing human capital. Many common human resource structures actually stifle human capital with contrived organizations and positions, position or job descriptions, salary scales, and career plans.

Result-performance Management (R-PM) develops needed capabilities to produce result value and increase human capital worth

Result-performance Management (R-pM) manages human capital to deploy human personnel solutions to be ready to be managed to produce results, human capability solutions where required by the business to produce a specific result, and human knowledge solutions to develop human capabilities and to utilize specific solutions to produce specific results. [more...]s.

Enterprises make large capital investments, but do not invest in capital management

Enterprises have large sums invested in the capital that is utilized in performance, to achieve objectives. Most enterprises do not even know the extent the capital they have. There is no manageable organization of enterprise performance capital. So, much of our capital is not recognized as something of worth. Much capital is not documented or under management control. Performance capital is created day in and day out without being recognized as something of worth that should be managed and made available to improve enterprise performance.

Enterprises need to establish capital management to organize and manage capital

Enterprises do not manage capital from investments. The capital is not defined as specific performance solutions to be managed and utilized to create value. Instead, capital is assigned to a responsibility center as a burden for the manager to manage, assigned to an administrative function to be administered, or simply labeled as intangible assets to left unmanaged. This problem is discussed in the article “Replacing administration with capital management”.< [more...]>